Abstract: On the basis of theoretical analysis, this paper uses rolling regression and time-varying parameter vector auto-regression ( TVP-VAR) model to test and analyze the time-varying effect of rural financial development on rural consumption in China. Empirical results show that the effect of rural financial development on rural consumption in China is obvious between 1982 and 2014. Before 1996, the role of rural loans in promoting rural consumption was weak, and the increase of rural deposits and insurance had negative effect on rural consumption. After 1996, the increase of rural deposits, loans and insurance has significant positive in promoting rural consumption. Further analysis shows that rural loans play an important role in promoting rural consumption in short term, but in the long run, the increase of rural consumption depends more on rural deposits and rural insurance growth. Therefore, increase rural production and consumption credit services, developing the insurance that is suitable for rural residents and expanding the coverage of rural insurance are especially important in stimulating rural consumption in China.

Key words: Rural Finance   Rural Consumption   Time-Varying Characteristics   Multiplier Effect